Renters Buying A New Home - When Is The Right Time To Start Looking For A Home?

By
Real Estate Agent with Briggs Freeman Sotheby's International Realty 0596165

Most renters that want to buy a new home will often wonder when the right time is for them to start looking for a home.  Ultimately it's their decision, but I certainly have some recommendations that might be helpful. 

Here are a few key points that I feel all renters should understand about buying a home:

  • Their first mortgage payment is usually not due until 30-60 days after closing.
  • Renters should consider giving themselves some time to move out and make any desired repairs or updates to the home prior to moving out of their rental home.  Also, delays sometimes occur with the home purchase process that might be outside of everyone's control, so I strongly urge buyers to consider giving themselves a "buffer zone" of time in case a delay occurs.  Furthermore, all renters should consult with their landlord to find out what options they may have to extend their stay in case of unexpected delays.
  • Some types of transactions, such as foreclosures and especially short sales, can take longer to close than purchasing directly from an owner that isn't in distress.  Renters should consider the potential time it will take to close a transaction to avoid becoming "homeless" for a period of time or consider eliminating these seller types from their home search if a closing delay would cause significant problems. 
  • Despite the weak economy, homes that are in good condition are selling very quickly in many parts of D/FW, so spending a lot of time touring homes before a buyer is within a reasonable time of being able to sign a contract doesn't make much sense. Many of the best homes will quickly be gone and the best homes on the market usually require quick action on the part of a motivated buyer to compete with other buyers that may be bidding on the same home.
  • Getting pre-approved for a mortgage should always be the first step before looking at homes.  Mortgage guidelines have changed significantly over the last few years, and a good credit score does not always guarantee a buyer will be approved for a mortgage.  Furthermore, it makes much more sense to know your options, including the expected cost of down payment and the monthly payment, before falling in love with a home that won't fit the budget. 

Aside from these points to ponder, there may be other factors to consider depending on a person's individual situation. 

The fact that most lenders will not require the first mortgage payment to be paid for 30-60 days after closing is often a surprise to many renters.  Rent is typically paid in advance, whereas mortgage payments are typically paid one month in arrears.  For example, a renter who pays their rent on March 1st is paying for their rent for the month of March, whereas a homeowner who pays their mortgage payment on March 1st is actually paying interest for the month of February.  The interest for the days of the month in which a buyer closes is typically collected at closing and is part of the closing costs that are included on a lender's good faith estimate.  Sometimes we can negotiate this cost to be paid by the seller, as well as some of the other closing costs.  Each mortgage has its own specific set of guidelines regarding the amount of closing costs that can be paid by the seller. 

Because of this 30-60 day delay from the time of closing until the first mortgage payment is due, many renters may sometimes discover they have overbudgeted for expenses.  This will often allow them take some extra time to move without having to be out of their rental home on the same day as closing.  Unfortunately there are sometimes delays in closings that may be completely outside the control of everyone involved, so having an extra week or two might save a renter from being temporarily "homeless" in case this happens.  And regardless of that, many renters would love to enjoy a stress free move and have some time to update and make repairs to their new home before they move in.  Remodeling a vacant home is much less stressful than remodeling a home full of furniture, pets and children!

Everyone's individual situation is different, so contact me today so we can design a strategy for you that will give you the best chance of making your home purchase experience a good one! 

 

Posted by

John Jones, Realtor

Dallas City Center, Realtors

www.homesourcedallas.com

3100 Monticello Ave., Suite 200

Dallas, TX 75205

Dallas, TX Real Estate and surrounding areas of Richardson, Plano, Addison, Frisco, Carrollton, Farmers Branch, Garland, Allen, Irving, Rowlett, and Rockwall.

Dallas, TX neighborhoods and subdivisions of Lake Highlands, White Rock Lake, Lochwood, Eastwood, L Streets, M Streets, Hollywood Heights, Lakewood, Coronado and Gastonwood, Forest Hills, Lochwood, Eastwood, and Preston Hollow.

Copyright 2008-2013 by John Jones, All Rights Reserved.  You may reblog or republish with links back to this post. 

* THIS ARTICLE WAS ORIGINALLY PUBLISHED AT http://www.homesourcedallas.com  *

 

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
ActiveRain Community
Location:
Texas Dallas County
Groups:
Texas Real Estate
All Thing's Texas
Consumer Mortgage Tips
Mortgage Brokers
Dallas Real Estate
Tags:
renters buying a home
renter tips for buying a new home
when should a renter start to look for a new home to purchase

Spam prevention
Show All Comments
Rainer
230,656
Stephanie Reynolds
Integrity First Financial Group, Inc. - Santee, CA
East County San Diego Homes 619-838-4408

This is great advice for your renters turning homeowner! Especially now in dealing with short sales, the time it takes you would hate to see anyone displaced for any period of time.

Dec 10, 2009 11:20 AM #1
Rainmaker
400,727
John Cannata
214-728-0449 http://TexasLoanGuy.com - Frisco, TX
Texas Home Mortgage - Purchase or Refinance

I think there should be more classes available for buyers. Too many are not familiar with 'what to expect'. Sure, they can learn as they go but wouldnt you have rather had a few pointers before buying your home? I know I would have liked it years ago. Anyway, good tips your provide above.

Dec 11, 2009 01:38 AM #2
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
72,675

John Jones

Ask me a question
*
*
*
*

Additional Information